Correlation Between Commercial Vehicle and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Quaker Chemical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Commercial Vehicle and Quaker Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Quaker Chemical, you can compare the effects of market volatilities on Commercial Vehicle and Quaker Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Commercial Vehicle with a short position of Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Quaker Chemical.
Diversification Opportunities for Commercial Vehicle and Quaker Chemical
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Commercial and Quaker is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical and Commercial Vehicle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Commercial Vehicle Group are associated (or correlated) with Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Quaker Chemical go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Quaker Chemical
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the Quaker Chemical. In addition to that, Commercial Vehicle is 1.04 times more volatile than Quaker Chemical. It trades about -0.2 of its total potential returns per unit of risk. Quaker Chemical is currently generating about 0.07 per unit of volatility. If you would invest 14,000 in Quaker Chemical on September 1, 2024 and sell it today you would earn a total of 600.00 from holding Quaker Chemical or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Quaker Chemical
Performance |
| Timeline |
| Commercial Vehicle |
| Quaker Chemical |
Commercial Vehicle and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Quaker Chemical
The main advantage of trading using opposite Commercial Vehicle and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Quaker Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc |
| Quaker Chemical vs. Transport International Holdings | Quaker Chemical vs. TSOGO SUN GAMING | Quaker Chemical vs. Air Transport Services | Quaker Chemical vs. EVS Broadcast Equipment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |